A look into the plight of the lower class workers makes one think, when a person chooses to be an entrepreneur having a capital to invest, either earned, inherited or acquired through loans, they more or less demonstrate same behaviour towards the working class. Why do the entrepreneurs act greedily and fail to comprehend the rudimentary requirements of human beings? The unfair system of payments deprives them of their share of the profits and living standards. To address this issue, fairer system of minimum wage was introduced to succour the workers to raise their living standards.

In 1894, New Zealand was the first country to introduce minimum wage laws covering all the industries and businesses across the country followed by the Australia which proved rather successful leading to enactment of minimum wage in other countries.  In Pakistan, the first legislation was passed in 1961, which established the Provisional Minimum Wage Board to fix salaries for unskilled workers in the organisations with more than 20 or more workers. Later, law was amended in 1969 and 2001 with new legislations introduced.

Over the long period of time, economists have debated intensely on the impact of minimum wage.  Some of the economists tended to have opposed idea of minimum wage on the grounds that they reduce employment based on the researches across the American regions. The results had been mixed until an extensive research established the fact that minimum wage does not hurt employment. The idea that in a competitive market anything that artificially raises prices of labour will curb demand for it and the first to lose job will be an unskilled worker has proved wrong.

Though, especially in recent years, federal and provisional governments have been vocal about the legislation & and implementation of minimum wage in Pakistan but have apparently failed to implement.

Pakistan has the ninth largest workforce in the world working mostly in informal sector, approximately contributing between 25 to 40 percent of the GDP. Is the working class even getting paid the minimum wage, knowing that such a big chunk of cherry contributes informally towards the economy? It can be observed in all provinces where local governments have failed to implement this notion.

Recently, I have been questioning the waiters I get served by, the salesmen I buy stuff from, delivery drivers from fast food restaurants.  They all share the same feeling of being cheated and ill-treated.  When we start liking wrong things and a wrong thing becomes exceedingly important for us that’s when societies get morally corrupt.

No matter how much the annual profit is, the rate is fixed for them as supply exceeds demand, and plenty of them are available at lower rates.  One can imagine the state of our morality as the people who clean up our filth and squalor are paid lowest of them all. What generosity we show when it comes to cleaning! We love cleanliness but those who perform these tasks for us deserve nothing more than approximately Rs. 5,000 per month.

I believe that the providers of the basic services need to be valued more; the manufacturers working at factories in our industrial cities like Sialkot, Faisalabad and Karachi who actually produce in adverse conditions of the factory floors end up being worse off, need to be valued more. The capitalists running the factories take home all the profits and ironically make big donations to charities.

Studies have been conducted to examine the impact of minimum wage legislations in Pakistan but they have not been particularly accurate. Since, it is not possible to apparently infer the information from Labour Force Survey data, by quantifying the impact of increasing minimum wage in all four provinces is a huge and complicated task because it requires information to be collected from labour force itself through survey.

Slogans to increase the minimum wage to Rs. 14,000 were raised from all corners as argued earlier, but this does not take in account the inflation, as people are deprived of basic necessities such as housing, food etc. Poor classes need more protection from rising inflation. I think minimum wage in Pakistan should be indexed to prevent the erosion of purchasing power of masses living at around poverty line. Regulators and authorities must find a way, as it could be a huge step towards increasing consumption and aggregate demand in Pakistan.

In 2016, very much like the previous two decades, federal and provincial governments have failed to implement minimum wage due to bad governance and subsequent corruption and reluctance to neutralize inflation. This results in continuation in sufferings of the poor as millions keep hovering around the poverty line.

Nelson Mandela stated:

“Poverty is not an accident. Like slavery and apartheid, it is man-mad and can be removed by the actions of the human beings”